What will the European Banking Union look like (if it gets off the ground)? Andrea Enria of the EBA spoke to the European Parliament. He intimated that the Single Supervisory Mechanism could involve delegation by the ECB of “operational conduct of day-to-day supervisory oversight” to national authorities. He suggested that the problems of thinking about adjusting the voting mechanisms in the EBA Board of Supervisors (this is the problem of how to allocate voting between the euro and non-euro area states) should be resolved by moving away from country representation:

While I understand these concerns, I am very worried that the solution could simply raise the required votes for approving a proposal, coming very close to a unanimity principle. Our ability to decide could be seriously hampered. I would suggest that new mechanisms for decision making be considered, which are less based on country representation and country weights. After all, the EBA is requested to make technical decisions that work for the Single Market, not to craft compromises amongst representatives from Member States. The mechanisms of independent panels and reverse majority voting proposed by the Commission for decisions on cases of breach of law and mediation could possibly be adapted and applied also in our standard setting function.

While this approach (if the Member States could agree on it) could get past the euro-area/ non-euro-area issues, I’m not a great fan of the idea that financial regulation is merely technical and should therefore be developed by groups of experts.